Geothermal leasing reform bill clears Senate, may spur action in House

SNL
By Corbin Hiar
July 10, 2014

In a rare moment of bipartisan action, U.S. senators briefly set aside their differences on July 9 and passed a bill promoting geothermal energy development on federal lands by a voice vote. The move raised hopes within the industry that the recurring legislation can finally clear a sharply divided Congress.

The Geothermal Production Expansion Act, or S. 363, would allow a developer to make a noncompetitive, fair market value bid on up to 640 acres of federal land if it holds a lease and has technical data showing that the geothermal resource it is attempting to develop extends into the adjoining acreage. Karl Gawell, executive director of the Geothermal Energy Association, an industry trade group, described the legislation in an interview as a necessary modification to geothermal leasing law that will allow geothermal developers many of the same benefits afforded to oil and gas exploration companies.

The bill was introduced in February 2013 by Oregon Democratic Sens. Jeff Merkley and Ron Wyden, who was then chairman of the Senate Energy and Natural Resources Committee, and was co-sponsored by four other senators, three of whom are Republicans. It then cleared the energy committee three months later.

In May 2013, a companion measure was introduced in the House by Reps. Mike Simpson, R-Idaho, and Peter DeFazio, an Oregon Democrat who is the ranking member on the House Natural Resources Committee. That bill, H.R. 2004, has picked up additional sponsors since then but has not yet been considered in committee.

In a joint emailed statement July 10, the Oregon senators touted the legislation and urged lawmakers in the lower chamber to reconsider it. "This bill promotes clean energy development while protecting taxpayers," Wyden, who is now chairman of the Senate Finance Committee, said in the statement. "I encourage my colleagues on the House side to pass this bill so geothermal developers can get development rights at fair market value without having to wait for lease nominations or speculators driving up the price of leases."

Merkley added, "We should be doing everything we can to boost production of innovative, affordable, and renewable domestic energy sources." The joint statement noted that the U.S. Bureau of Land Management currently can lease about 250 million acres that contain geothermal power potential.

Gawell said the geothermal industry is hopeful that the bill, which failed to pass the House during the last legislative session, can make it to the president's desk this time around. "It's a fairly modest piece of legislation," he said. "I don't think it really represents an ideological test point between the House and the Senate."

But with the August recess looming and the midterm elections coming soon after Congress returns in September, there are still some major concerns for the bill. "The merits of the legislation might get lost in the politics of the situation," Gawell acknowledged.

Still, he added: "The way the [leasing] law works doesn't make sense, so our hope is that we can get some action on it this year."